Diamond producers can’t rest on their laurels in the face of synthetics threat

| May 2nd, 2018

Diamond producers can’t rest on their laurels in the face of synthetics threat
"Diamond producers can’t rest on their laurels in the face of synthetics threat"

In January 2017 I asked the then De Beers head of media relations Lynette Gould whether natural diamond producers were worried that they might lose some market share to lab-grown stones.

She was dismissive in her response, claiming that natural diamonds and synthetics were two different propositions.

Our research consistently shows that consumers do not see synthetic diamonds as potential substitutes for natural diamonds,” said the De Beers spokesperson at the time.

She, however, said that the challenge that they needed to focus on was ensuring the reputation of the industry – and the integrity of the product we sell – was beyond question.

Challenges to product integrity, such as the risk of undisclosed synthetics infiltrating the pipeline, are things that we take very seriously,” said Gould.

The consumer response to buying a synthetic product when they believed it to be natural could generate a real confidence issue for the industry, so the right steps need to be taken at all stages of the pipeline – but particularly in the midstream – to address this.”

Producers of synthetic diamonds are accused of employing dirty marketing strategies.

Many laboratory-grown diamond companies describe their diamonds as being green or eco-friendly and use words such as ‘greenhouse’ or ‘foundry’ to try and influence opinion,” said Arslanian Group managing director Sahag Arslanian at a mining conference in Cape Town last February.

They [millennials] are also being told that [synthetic] diamonds are real diamonds without the human or environmental impact. This is misrepresentation.

They deceive the consumer, because a synthetic diamond is not worth much at retail value. Millennials are being fed lies, because the gap between reality and marketing is huge. Synthetic retailers are winning the marketing battle.”

Realisation

Perhaps, having realized that they were losing the marketing battle, as Arslanian posited, the Diamond Producers Association (DPA) decided to embark on a massive marketing drive for younger generations, dubbed “real is rare, real is a diamond”.

Real is rare, real is a diamond makes a parallel authenticity and the timeliness of a product and the authenticity of the underlining relationship that you express with a diamond,” chief executive Jean-Marc Lieberherr told a diamond conference in Botswana last November.

Now it’s more than that, it’s also a commitment for us all to live in a sincere and genuine manner in the diamond sector. It’s a promise of transparency and authenticity.

Former Botswana minerals and energy minister David Magang once said synthetics represent one of the greatest threats to Botswana’s economic well-being for the ramifications are that even if our mines were to continue to be operational for the next 100 years, no one would buy our diamonds if synthetics became fashionable.

He was right to be worried about the potential threat of synthetics, unlike Gould who dismissed their threat.

The fact that they are cheap compared with natural stones, coupled with the smear campaign that natural diamonds were mined unethically, inter-alia, make them attractive to the younger generation.

Besides the production of lab-grown stones was growing.

The total annual production of synthetics was between 8 million and 10 million carats, with gem qualities of about 4.5 million carats, according to Diamond Intelligence Briefs.

This was compared with the total annual production of natural diamonds set at 124 million carats, with gem qualities of between 85 million and 90 million carats.

Another threat is the packaging of synthetics as natural stones by some unscrupulous dealers.

De Beers had made major investments in synthetic detection technology over a number of decades.

Our ability to produce different types of synthetic material means that we have the ideal test subjects for our constantly developing detection instruments,” said Gould in January 2017.

We invest significantly in research in the area of synthetic diamonds and we have a very strong development pipeline in place to address key risk areas. We have also introduced an expanded Melee Testing Service at our International Institute of Diamond Grading & Research Centre in Surat to support the midstream further in identifying potential undisclosed synthetics in the pipeline and providing assurance to their own customers.

Alrosa had also come up with technology to detect undisclosed synthetic diamonds.

It’s not enough to sift out fake diamonds and do nothing as synthetic diamond producers aggressively push their products by hook or by crook.

Reports that DPA would this year spend $70 million on generic marketing to enable the organisation to grow its US marketing and expand campaigns around the world, were encouraging.

Approximately half of the world’s demand for polished diamonds comes from the US, with a 47 percent share of global demand in 2016 and that explains the main focus on the country.

Diamond producers can no longer afford to rest on their laurels just because they mine a billion-year old miracle of nature that had no equal on this earth.

They should prove to the millennials that their diamonds were mined in a sustainable manner, as well as in an ethical manner to maintain their market share.

Source Rough&Polished

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